Here's what GE CEO Jeff Immelt means when he talks about the 'Industrial Internet'

As part of the makeover, CEO Jeff Immelt has been throwing around
the term 'Industrial Internet.'

If you're wondering what that means — and why a company that
started out manufacturing light bulbs is talking about digital
innovation — Immelt shed a little light on his thinking at
Business
Insider's IGNITION 2015 conference on Wednesday.

"When I talk about the industrial internet it's really
capturing data off of machines and throwing back
into valuable insight for our customers," Immelt said. "That's
going to be worth trillions of dollars in the economy and I think
it's going to transform GE."

Essentially, GE captures data through sensors that are attached
to the various things it manufactures, like trains.

"The data fundamentally is going to be modeled and turned into
performance outcomes," Immelt explained.

The problem they are trying to solve is declining industrial
productivity. To do so, the company has created its own
cloud-based operating system that's open to developers.

"We're going to broaden out an operating system and
applications on our assets and on competitors assets and
industrial assets," Immelt said. "And that's probably the
most exciting thing I've worked on in 30 years."

Tracking trains

AP

For example, Immelt said, a train might have 300 sensors pulling
a terabyte of data on one route, including things
like fuel and emissions performance, and pictures
of the track to show whether there are cracks.

"So that's all valuable information, all coming off a control
center that we have on the locomotive," he explained.

How might it be used?

Immelt said that an average train goes 22 miles per hour. But if
it could go 23 miles per hour, it would be a $250 million
difference — or a 20% improvement in profitability for its
operator.

"That's going to be done with information and data," Immelt said.

The beneficiaries will include GE itself, which can make
better locomotives, and other customers who buy the data, or
subscribe to the open, cloud-based operating system to make
their own improved products.

"There's going to be a couple of industrial companies that get
transformed as part of that, and we want to be one of them," he
said.